Focus on Process, Not the Outcome - Seth Klarman (Billionaire Investor ) Many investors mistakenly establish an investment goal of achieving a specific rate of return. Setting a goal,unfortunately, does not make that return achievable . Indeed, no matter what the goal, it may be out of reach. Stating that you want to earn, say, 15 percent a year, does not tell you a thing about how to achieve it. Investment returns are not a direct function of how long or hard you work or how much you wish to earn . A ditch digger can work an hour of overtime for extra pay,and a piece worker earns more the more he or she produces. An investor cannot decide to think harder or put in overtime in order to achieve a higher return. All an investor can do is follow a consistently disciplined and rigorous approach; over time the returns will come. Rather than targeting a desired rate of return, even an eminently reasonable one, investors should target risk.
Posted on: Sun, 22 Sep 2013 05:36:50 +0000
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